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It was a first year production model - search the forums and google, I believe they have many problems with them.

I'd recommend a 2004 or 2005 E46 325i. I have a 2004 325i and love it, easier engine for maintenance and less electronic issues vs. the 2006. For the amount of money he's going to spend, he could probably find a low milage with sport package etc. He could even find a 330i, the extra HP is quite nice and most of them are loaded with all the features.

GL and make sure he has a mechanic look everything over before buying the new car, RMP is pretty big on here for pre-purchase inspections and they could do any work it may need in the future.